Perks Won’t Keep Your Best People. These 3 Things Will

We have an imbalance in our workplaces. For years, companies have leaned too heavily on external incentives and benefits to inspire loyalty and performance, and that approach ignores the psychology of motivation. Once people’s basic financial needs are met, what keeps them at a company and helps them grow there is internal reward, not external. A strong salary, a gym membership and other perks may attract top talent, but they’re never the reason people stay.

As a therapist and leadership consultant, I’ve spent more than 30 years studying why people flourish in the systems they’re part of, from families and schools to workplaces. Over that time, I’ve found that healthy systems consistently provide three foundations. CEOs who build and measure these three foundations create companies that attract and keep top talent.

1. Invest in connection

I define leadership as how, and with whom, we exert influence. We influence one another through connection, not force, and no one will follow someone they don’t feel connected to.

Compensation, prestige, equity and benefits may attract top talent, but they don’t create long-term loyalty on their own. If another company can offer it, it isn’t what will keep people at yours. Something deeper has to root a person in an organization, and you can measure it by how connected they feel to its people and culture.

In my work, I often see leaders misunderstand what connection means. Many assume it’s about being nice or offering constant affirmation. Real connection comes from honest communication, from being able to tell the truth even when it’s hard. Hard conversations require trust. That’s why mentorship is the most powerful retention tool an organization has. People want to know that someone sees their potential and understands where they hope to grow.

Top talent needs to feel seen within an organization. Leaders, in turn, can’t stay invisible and still expect employees to feel connected to them. People need real contact with those who shape the organization and make decisions about its future.

People rarely leave a company because of the workload. More often, they leave a culture they don’t feel connected to. External rewards might get them in the door, but internal rewards keep them there for the long haul.

2. Build a sustainable structure

The second foundation is structure, which I define as the rules of engagement. The structure within a workplace is the set of boundaries or rules that govern how a team engages with one another at a behavioral level. People understand their job responsibilities, but the structure is what tells them what to do and whom to engage with when something isn’t working. A leader’s responsibility is to set that structure, communicate it to the team and maintain it. 

Technology has removed many of the natural limits that once existed between work and the rest of life. Employees now carry their workplaces home with them in the form of their smartphones. A message can arrive before breakfast, during dinner, at a family celebration or just as someone is preparing to sleep. 

A leader may tell employees that they are not expected to respond outside working hours, but if that same leader regularly sends late-night requests and praises whoever answers first, the actual structure says something different. People do not follow policies as closely as they follow patterns. The behavior that leadership rewards becomes the culture, and that culture is one of the key factors in employee retention rates and productivity. 

Research has repeatedly challenged the assumption that more time produces more value. In a ⁠study published in The Economic Journal, Stanford economist John Pencavel analyzed productivity data from British munitions workers, including 122 weekly observations across four groups whose working weeks ranged from 24 to 72.5 hours. He found that output increased roughly in proportion to hours worked up to around 48 hours per week, but beyond that point, each additional hour produced progressively smaller gains. In one comparison, a 48-hour, six-day week actually produced more output than a 70-hour, seven-day week, illustrating the diminishing returns of excessive working hours.

The consequences of excessive working hours extend beyond productivity. In a ⁠prospective study of 2,123 British civil servants, researchers followed participants for an average of 5.8 years and found that employees working 11 or more hours per day had approximately 2.5 times the odds of developing a major depressive episode compared with those working seven to eight hours, even after accounting for factors including physical illness, alcohol use, job strain and workplace social support.

That finding is supported by a much broader body of evidence. A later ⁠systematic review and meta-analysis examined data from 189,729 people across 35 countries and found an association between long working hours and the onset of depressive symptoms. Separately, ⁠research published in The Lancet, drawing on data from more than 600,000 people, linked longer working hours with increased cardiovascular risk. The ⁠World Health Organization and International Labour Organization now identify working 55 hours or more per week as a serious occupational health risk, citing increased risks of ischemic heart disease and stroke compared with working 35 to 40 hours per week.

A lack of structure is a fast track to burnout. We need rules and limits around how we engage at work; otherwise, the system quickly becomes a free-for-all, with everyone operating under different expectations. A chaotic structure creates a chaotic system, and a chaotic system eventually becomes an unproductive one. Top talent needs enough structure to know how the organization operates, alongside enough flexibility to perform in a way that is sustainable for them.

Employees have options, and they are far more likely to stay where the structure allows them to do exceptional work without sacrificing their well-being in order to sustain it.

3. Give employees a future they can imagine

The third foundation is expectation. Expectations are not only what an organization expects from an employee, but what an employee expects of their organization. Top talent wants to know what they are building toward and whether the company has the capacity to help them continue growing. 

In clinical terms, I define expectation as imagined growth. It is the ability to look at someone, understand where they are today and imagine where they may be capable of going. Every employee has strengths and weaknesses. A leader’s responsibility is not only to assess present performance, but to see what that person could become and help create a path toward it.

This ability depends on connection. You have to understand someone before you can meaningfully imagine their growth. A healthy expectation is one of the purest forms of belief in another person. When leaders set thoughtful expectations, they communicate that they see greater capacity in someone. When expectations are absent, unclear or implied, people are left guessing what success looks like and whether their continued development matters.

When someone feels they have plateaued, disengagement often begins long before they formally resign. They may continue completing their work, but their emotional investment starts to diminish. Another company offering a fresh challenge or clearer future can quickly become appealing, even when the compensation difference is relatively small.

Top talent is rarely satisfied by remaining static. These individuals are often successful precisely because they are driven to learn and take on greater responsibility. If an organization benefits from that ambition without continuing to invest in it, loyalty becomes fragile.

Conclusion

Most organizations understand how to attract talent. Far fewer understand the psychology behind retaining it. The external benefits a company can offer remain important, but that’s just one part of the picture of an employee’s relationship with a company. People stay where they feel visible and connected to those leading them, when the structure around them allows demanding work to remain sustainable, and where they can clearly see who they are becoming.

The race for top talent will not be won by the companies willing to offer the most perks. It will be won by the leaders who correct this imbalance and invest just as seriously in the internal conditions that make exceptional people want to stay.